Even with health insurance, a serious injury or illness can wreak havoc on family finances. Deductibles and copays may end up costing thousands of dollars. So how can you prepare for the unexpected and avoid worrying about paying your medical bills?
YES: negotiate expenses with your doctor
If your insurance doesn’t cover any expenses, try negotiating with your healthcare provider for a lower charge or longer payment term. If you can make a one-time balloon payment, some providers will settle the debt for less than you owe. Otherwise, many providers will work with you to set up an interest-free payment plan with a schedule according to your needs. If you are having difficulty with the billing department or do not understand your charges or your payment options, an ombudsman can help you.
DON’T: turn medical debt into credit card debt
As much as you want to stop the flow of incoming bills, you should avoid paying them by credit card if you can’t fully pay off that debt in the near future, says Miranda Marquit, blogger at Planting Money Seeds.
If you decide to transfer debt to a credit card, keep in mind that FICO, which developed the credit scoring model used by most lenders, has announced a new scoring model that differentiates medical and non-medical bills from Medical Billing Services. Collection agencies and “decrease the importance and impact that certain medical debts have on your credit score,” says Marquit. Of course, there are always chances of negative effects on your credit if you don’t pay your debts on time.
YES: check your medical bills for errors
Check your medical bill for errors or surcharges before you start paying. Request an itemized bill and look for signal words, including “kit,” “tray,” and “room charges,” or “room and board.” These terms cover charges for different items that you should view separately.
For example, the hospital may charge you for a surgical kit and tray and then wrongly charge you for surgical instruments. Finding and disputing mistakes can possibly save you hundreds of dollars.
NO: think you are alone with your medical expenses
Remember, you are not the first person or family to experience expensive medical bills. The U.S. Census Bureau’s National Health Interview Survey found that one in five people belongs to a family with difficulties paying their medical bills and one in 10 is part of a family with medical bills that can’t pay at all.
YES: consider seeking the help of organizations to pay for your medical expenses
Many consumers facing financial difficulties have turned to organizations for help with their medical expenses, so this is an option in the event of an extremely serious injury or illness. For example, United Way, through its 2-1-1 TM program, provides 24/7 information and referral assistance to individuals and families eligible for medical assistance.
Health problems and medical expenses can be overwhelming, but choose to just ignore the onslaught of bills. With all the changes in the healthcare industry, doctors can be quicker than you expect to refer unpaid bills to collection agencies.